Legal Expert’s Testimony on Life Insurance Investor Practices Excluded

Stranger originated life insurance (“STOLI”) policies, specifically, “involve speculators collaborating with an individual to obtain a life insurance policy in the name of that individual and then selling some or all of the death benefit payable upon the death of the insured to stranger investors.”

On March 3, 2023, Plaintiff Ameritas Life Insurance Corp. (“Ameritas” or “Plaintiff”) filed its complaint, requesting that the Court declare that the $3 million policy at issue on the life of Marvin Flaks (the “Policy”) constitutes a STOLI policy and, thus, is void for lack of an insurable interest.

Defendant Wilmington Savings Fund Society, FSB’s (“Wilmington Savings” or “Defendant”) filed a Daubert motion to exclude the testimony of Plaintiff and Counter-Defendant Ameritas Life Insurance Corp.’s expert Michael L. Vild under Federal Rule of Evidence 702.

Law And Legal Expert Witness

Michael L. Vild obtained his Juris Doctor from Notre Dame Law School in 1991 and his Bachelor of Music from Ohio State University in 1988.

Since January 2019, Vild has been a partner at the law firm of Cross & Simons, LLC (“Cross & Simmons”). His practice at the firm “primarily involves corporate and commercial litigation in state and federal courts in Delaware.”

Aside from his bar memberships, Vild served as “board member of captive insurance companies in the SCOR family of companies; . . . as member of the Board of Directors of Scottish Re (U.S.) and related life reinsurance entities and as Delaware resident director of several small captive insurance companies.”

Want to know more about the challenges Michael Vild has faced? Get the full details with our Challenge Study report.

Discussion by the Court

Wilmington Savings requested that the Court exclude Vild’s opinions and testimony with respect to four issues: (1) the choice of law inquiry; (2) the insurable interest issue; (3) the reasonableness of Ameritas’ investigation conduct; and (4) life insurance investor practices.

A. The Court Excludes-in-Part and Does Not Exclude-in-Part Vild’s Opinions and Testimony Concerning the Choice-of-Law Analysis

Wilmington Savings contended that the Court should exclude Vild’s opinions and testimony concerning the choice-of-law analysis because, according to Wilmington Savings, Vild is not qualified to opine on this issue and, separately, because his opinions and testimony are not helpful.

First, while Vild cannot testify on the ultimate answer to the choice-of-law analysis, Vild is qualified to opine and testify, as the former Deputy Insurance Commissioner of the Delaware Department of Insurance, on whether Delaware has an interest in its insurance law being applied to the insurance policy at issue in this action. Likewise, as the former Deputy Insurance Commissioner of the Delaware Department of Insurance, Vild is qualified to opine and testify on how the need to regulate STOLI arose and STOLI principles generally.

Second, Vild’s opinions and testimony on these topics would be helpful because this action and Delaware’s interest in its law being applied to the insurance policy in this action involves complex issues of insurance, including as they relate to STOLI, that can be simplified or clarified by an expert with relevant experience in insurance, such as Vild.

Thus, the Court excluded-in-part and did not exclude-in-part Vild’s opinions and testimony concerning the choice-of-law analysis.

B. The Court Excludes Vild’s Opinions and Testimony Concerning STOLI and Insurable Interests

Wilmington Savings contended that the Court should exclude Vild’s opinions and testimony concerning STOLI and insurable interests because, according to Wilmington Savings, Vild is not qualified to opine on these issues and, separately, because his opinions and testimony are not helpful.

First, Vild, as an expert witness, cannot testify on the legal conclusion as to whether the insurance policy in this action constitutes STOLI.

Second, Vild’s opinions and testimony on these topics would be helpful because this action involves complex issues of insurance, including as they relate to STOLI, that can be simplified or clarified by an expert with relevant experience in insurance, such as Vild.

The Court acknowledged that much of Vild’s experience did not concern insurance or even STOLI specifically and that Vild has many years of experience and expertise in other subjects from his time at various institutions (for example, his nine years of in-house counsel experience from two different casinos). However, that a person has expertise deriving from many years of experience in a particular subject does not foreclose that person from also being qualified in another subject and, thus, able to provide helpful testimony on that subject.

Thus, the Court excluded-in-part and did not exclude-in-part Vild’s opinions and testimony concerning STOLI and insurable interests.

C. The Court Excludes the Opinion and Testimony of Vild Concerning the Reasonableness of Ameritas’ Conduct

Wilmington Savings contended that “Vild is not qualified to opine on whether Ameritas acted reasonably.”Wilmington Savings provided several grounds in support of this contention, including, but not limited to, that “Vild has admitted he is ‘not a claims administration expert.’

Ameritas merely contended that “Vild offered opinions grounded in decades of regulatory and advisory experience evaluating insurer conduct under comparable conditions” and that courts “regularly admit such testimony from experts with regulatory or legal backgrounds.” However, even if courts regularly admit such testimony, the Court is unable to discern the purportedly “comparable conditions” that have purportedly informed Vild’s experience since Ameritas fails to cite anything in the record to evince as much.

The Court determined that Vild was able to opine and testify on whether Delaware has an interest in its law being applied to the insurance policy at issue in this action, how the need to regulate STOLI arose, and STOLI principles generally. As the former Deputy Insurance Commissioner of the Delaware Department of Insurance, Vild has direct and substantial experience on these insurance issues from the enforcement and regulatory perspective, thereby qualifying him and rendering his testimony helpful.

Here, however, Ameritas has failed to demonstrate that Vild has any relevant experience on the process by which insurers complete their investigations, including with respect to STOLI and insurable interests. For example, Vild never worked at an insurer and, in his private practice experience, he never litigated or provided any counsel on STOLI issues.

D. The Court Excludes the Opinion and Testimony of Vild Concerning Life Insurance Investor Practices

In his rebuttal report, Vild opined on several investor practices, including whether (1) it is “the industry practice for investors to rely upon the underwriting and diligence performed by insurance companies,” (2) it is reasonable for investors to rely on letters from legal counsel concerning whether an insurance policy is “valid under the insurable interest laws of various states,” and (3) “investors reasonably expect that an insurer will disclose a suspicion that a policy is potential STOLI.”

Wilmington Savings contended that “Vild is not qualified to opine on [these] life insurance investor practices.” Wilmington Savings provided several grounds in support of this contention, including, but not limited to, that Vild “has no experience working for an investor or participating in a transaction to buy or sell life insurance in the secondary or tertiary markets.” In response, Ameritas failed to cite anything in the record evincing the purported qualifications of Vild to opine on life insurance investor practices. Instead, Ameritas resorts to, for example, generically contending that what “STOLI investors …. customarily do is wrong.”

However, generic contentions about industry custom and attempted explanations of legal precedent are irrelevant to the question of Vild’s qualifications to opine on life insurance investor practices. For these reasons, the Court found that Ameritas failed to show that Vild has any experience as an insurance investor, working for or regulating an insurance investor, participating in a transaction to buy or sell life insurance in the secondary or tertiary markets, or otherwise is qualified to opine on life insurance investor practices. Thus, the Court excluded Vild’s opinion and testimony concerning life insurance investor practices.

Held

The Court granted-in-part and denied-in-part the Defendant’s Daubert motion to exclude the testimony of Plaintiff and Counter-Defendant Ameritas Life Insurance Corp.’s expert Michael L. Vild.

Key Takeaway:

It is not necessary that the expert have expertise in the precise subject matter at issue, and an expert should not be excluded simply because the trial court does not deem the proposed expert to be the best qualified or because the proposed expert does not have the specialization that the Court considers most appropriate.

Case Details:

Case Caption:	Ameritas Life Insurance Corp. V. Wilmington Savings Fund Society FSB
Docket Number:	1:23cv236
Court Name:	United States District Court for the District of Delaware
Order Date:	November 07, 2025